EX-99.6 7 d794166dex996.htm EX-99.6

SUPPLY CHAIN Ryan Kilcullen 24 September 2014 Exhibit 99.6

DISCLAIMER 2 This Management Presentation contains forward-looking statements. James Hardie may from time to time make forward-looking statements in its periodic reports filed with or furnished to the SEC, on Forms 20-F and 6-K, in its annual reports to shareholders, in offering circulars, invitation memoranda and prospectuses, in media releases and other written materials and in oral statements made by the company’s officers, directors or employees to analysts, institutional investors, existing and potential lenders, representatives of the media and others. Statements that are not historical facts are forward-looking statements and such forward-looking statements are statements made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include: • statements about the company’s future performance; • projections of the company’s results of operations or financial condition; • statements regarding the company’s plans, objectives or goals, including those relating to strategies, initiatives, competition, acquisitions, dispositions and/or its products; • expectations concerning the costs associated with the suspension or closure of operations at any of the company’s plants and future plans with respect to any such plants; • expectations concerning the costs associated with the significant capital expenditure projects at any of the company’s plants and future plans with respect to any such projects; • expectations regarding the extension or renewal of the company’s credit facilities including changes to terms, covenants or ratios; • expectations concerning dividend payments and share buy-backs; • statements concerning the company’s corporate and tax domiciles and structures and potential changes to them, including potential tax charges; • statements regarding tax liabilities and related audits, reviews and proceedings; • statements regarding the possible consequences and/or potential outcome of the legal proceedings brought against two of the company’s subsidiaries by the New Zealand Ministry of Education and the potential product liabilities, if any, associated with such proceedings; • expectations about the timing and amount of contributions to Asbestos Injuries Compensation Fund (AICF), a special purpose fund for the compensation of proven Australian asbestos-related personal injury and death claims; • expectations concerning indemnification obligations; • expectations concerning the adequacy of the company’s warranty provisions and estimates for future warranty-related costs; • statements regarding the company’s ability to manage legal and regulatory matters (including but not limited to product liability, environmental, intellectual property and competition law matters) and to resolve any such pending legal and regulatory matters within current estimates and in anticipation of certain third-party recoveries; and • statements about economic conditions, such as changes in the US economic or housing recovery or changes in the market conditions in the Asia Pacific region, the levels of new home construction and home renovations, unemployment levels, changes in consumer income, changes or stability in housing values, the availability of mortgages and other financing, mortgage and other interest rates, housing affordability and supply, the levels of foreclosures and home resales, currency exchange rates, and builder and consumer confidence.

3 Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “aim,” “will,” “should,” “likely,” “continue,” “may,” “objective,” “outlook” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Readers are cautioned not to place undue reliance on these forward-looking statements and all such forward-looking statements are qualified in their entirety by reference to the following cautionary statements. Forward-looking statements are based on the company’s current expectations, estimates and assumptions and because forward-looking statements address future results, events and conditions, they, by their very nature, involve inherent risks and uncertainties, many of which are unforeseeable and beyond the company’s control. Such known and unknown risks, uncertainties and other factors may cause actual results, performance or other achievements to differ materially from the anticipated results, performance or achievements expressed, projected or implied by these forward-looking statements. These factors, some of which are discussed under “Risk Factors” in Section 3 of the Form 20-F filed with the Securities and Exchange Commission on 26 June 2014, include, but are not limited to: all matters relating to or arising out of the prior manufacture of products that contained asbestos by current and former James Hardie subsidiaries; required contributions to AICF, any shortfall in AICF and the effect of currency exchange rate movements on the amount recorded in the company’s financial statements as an asbestos liability; governmental loan facility to AICF; compliance with and changes in tax laws and treatments; competition and product pricing in the markets in which the company operates; the consequences of product failures or defects; exposure to environmental, asbestos, putative consumer class action or other legal proceedings; general economic and market conditions; the supply and cost of raw materials; possible increases in competition and the potential that competitors could copy the company’s products; reliance on a small number of customers; a customer’s inability to pay; compliance with and changes in environmental and health and safety laws; risks of conducting business internationally; compliance with and changes in laws and regulations; the effect of the transfer of the company’s corporate domicile from The Netherlands to Ireland, including changes in corporate governance and any potential tax benefits related thereto; currency exchange risks; dependence on customer preference and the concentration of the company’s customer base on large format retail customers, distributors and dealers; dependence on residential and commercial construction markets; the effect of adverse changes in climate or weather patterns; possible inability to renew credit facilities on terms favourable to the company, or at all; acquisition or sale of businesses and business segments; changes in the company’s key management personnel; inherent limitations on internal controls; use of accounting estimates; and all other risks identified in the company’s reports filed with Australian, Irish and US securities agencies and exchanges (as appropriate). The company cautions you that the foregoing list of factors is not exhaustive and that other risks and uncertainties may cause actual results to differ materially from those referenced in the company’s forward-looking statements. Forward-looking statements speak only as of the date they are made and are statements of the company’s current expectations concerning future results, events and conditions. The company assumes no obligation to update any forward-looking statements or information except as required by law.

• Supply Chain at JH • Network Expansion Impact • Customer Focus • Freight Market and JH Performance AGENDA 4

JH SUPPLY CHAIN OVERVIEW 5

JH SUPPLY CHAIN Raw Material Suppliers Manufacturing Scheduling Outbound Freight Channel Management Warehousing Jobsite Delivery Raw Material Requirements Inventory Strategy Capacity Planning Production Scheduling Demand Forecasting Managing the three flows: Product, Information and Cash Flow Product Flow Information Flow JH Supply Chain Organization 6

JH SUPPLY CHAIN OBJECTIVES JH Supply Chain has two primary objectives 1. Customer value creation 2. Operational and financial efficiency We accomplish by • Leveraging our network scope and operating capability to enhance the profitability and experience of our customers • Deploying optimization concepts and tactics to maximize financial returns to JH 7

EXAMPLE 1: VMIS VMIs increase the profitability of our channel partners VMIs are a critical element of our overall business strategy 8 Optimizing JH Returns Customer Value Creation Lower freight costs - Weight max, ideal sourcing, lead time Order volatility is greatly reduced Increase in C+ penetration Enables scale for jobpack LTLs Significant reduction in working capital Wider SKU offering Reduced order processing costs – JH does all replenishment activities Ability to place LTL special orders

EXAMPLE 2: JOBPACKS Customer Value Creation • To-the-piece ordering capability reduces jobsite waste and returns cost • Made-to-order at standard lead-times eliminates the need for inventory • Access to the full JH line enables selling the whole house The efficiency of our jobpack supply chain enables a competitive advantage by delivering “the tail” at an unmatched cost-to-service Jobpacks enable full wrap ColorPlus through an efficient supply chain Optimizing JH Returns • HardieLink enables efficient order flow • APO scheduling creates efficient manufacturing sequencing and changeovers • Manugistics TMS optimizes multi-stop routing & leverages VMI volume scale 9

JH NETWORK EVOLUTION JH Network – FY05 Customer Value Creation Optimizing JH Returns 10 • Limited non-product value creation in JH supply Chain • Product mixing rules force complexity onto our customer base • Production scheduling is focused on enabling flat sheet PcI/PdI • Freight model is optimized for full truckload purchasing performance

JH NETWORK EVOLUTION JH Network – Today Optimizing JH Returns Customer Value Creation 11 • Network density enables flexible ordering rules to mix full range of products • VMIs and jobpacks create profitable options for servicing all builder types • Focus is on internal JH optimization of production scheduling and freight routing • Expanded scope of JH network enables significant reduction of average truck haul

JH NETWORK EVOLUTION JH Network – 35/90 Customer Value Creation Optimizing JH Returns 12 • Customer-focused value chain makes JH an easy-to-work with Business Partner • Deeper understanding of non-product value enhances customer profitability • Integrated supply chain (raw materials to market) enables true optimization • Efficiency focus is on inbound/outbound opportunities and deep customer partnerships

CHALLENGES OF INCREASING NETWORK SCALE A growing network also brings supply chain challenges Capturing the full benefit of scale requires: 1. A step change in organizational capability 2. Optimization logic in our daily supply chain operations 13

ORGANIZATIONAL CAPABILITY 5 Pillar Strategy Recruit Engage Develop Evaluate Grow/Promote Attract, develop and retain supply chain talent that can manage the challenges of our 35/90 network External Technical Expertise Leverage the Chicago MBA Program Customer Operations as a Pipeline Quality Performance Management In-Role Career Progression Mapping Manufacturing Experience Assignment Pilot APICS Technical Development Program PG&D Goal Setting and Progress Tracking 14 Connection to the Business Speaker Series JHMT Lunch events Early-Career “Next Steps” Events

PROCESS CAPABILITY Capturing the opportunities of a highly integrated network requires enhanced operating capabilities Order Flow Planning Processes Freight Management • Integration with customer ERPs • HardieLink • VMI Transaction Automation • Flat sheet scheduling logic • APO deployment • Network landed cost optimization • Multi-stop optimization • Purchasing model enhancements 15

PROCESS ENHANCEMENT EXAMPLE Automated order flow systems enable jobpack fulfillment with high organizational, manufacturing and freight cost efficiency Customer orders with multiple SKUs & colors Automated, optimized sequencing Re-aggregated orders, ready for shipment HardieLink Order Entry System TMS Multi-Stop Optimizer APO Production Scheduling Optimization 16

CUSTOMER VALUE INITIATIVE: ON-TIME SERVICE 17

THE IMPORTANCE OF CONSISTENT SERVICE • Secures market position • Enables us to capitalize on our sales force investment • Maintains our brand • Reduces waste in our internal organization – allows us to invest in growth, rather than maintenance of our existing base Consistent on-time performance critical component of enabling 35/90 Importance to the Channel Importance to Hardie On-time service performance requires a systematic approach to capacity management and day-to-day operational planning 18

ENSURING SUFFICIENT CAPACITY FOR DEMAND Regional Sourcing Zones Customer demand is grouped into sourcing zones Lowest Cost Sourcing Manufacturing & freight costs determine “ideal” source plant Introducing manufacturing capacities shifts the model Actual Network Sourcing Constant network balancing ensures we have sufficient production capacity to meet customer demand Our objective is to fulfill every customer order at the lowest landed cost, with a high level of on-time service 19

OPERATIONAL EXCELLENCE IN ORDER FULFILLMENT A strong customer focus drives our daily replenishment activities 20

ON-TIME SERVICE SUMMARY • On-time service is an important component of JH Customer Focus and has a direct link to 35/90 • Our supply chain systems are designed for on-time service at optimized total landed cost • Our recent performance has been strong – the most recent 3 quarters are our highest service performance in the last 5 years • Consistent on-time service enables us to continue to pull buffers out of our supply chain – resulting in further cost reductions 21

MAXIMIZING JH RETURNS: MANAGING THE RISING TRANSPORTATION MARKET 22

EXTERNAL TRANSPORTATION COST Market rates* have rebounded dramatically from recession-levels External factors are driving freight costs to historic highs *Source: KeyBanc Capital Markets Truckload Spot Index 23

HEADWINDS IN THE FREIGHT MARKET Fundamental shifts in the demand/supply equation driving cost The result of this shift will be a higher cost market than historical reference points – We do not expect a return to pre-recession costs Demand Drivers Supply Constraints Post-recession economic recovery Increasingly congested rail system Recent regulatory changes that reduce driver capacity Demographic shifts = an annual net loss of drivers in the workforce More difficult credit environment limiting capacity investments 24 • Aging infrastructure = less efficient • Growing US petro industry that is becoming rail reliant

JH NETWORK AND MARKET FREIGHT COSTS FY05 – FY12 JH freight cost trended inline with market rates FY13 – FY15 JH freight costs separate from the market trend as a result of multiple initiatives to improve our network efficiency 25

PROGRESS DRIVING THE RECENT SEPARATION Result How it was Achieved 14% reduction in average length of truckload haul 5% more fiber cement on every truckload shipped 7% improvement in purchasing performance vs the market • Significantly higher utilization of rail • Plant-to-plant and ColorPlus® product network rail • VMI-enabled sourcing improvements • Automated LTL truckload building capability • VMI-enabled weight maximization program • Product weight logic optimization • 26% increase in JHBP brokerage volume • Pick-up window increase by improved planning • Targeted lane purchasing program 26

JH TRANSPORTATION SUMMARY • There are significant headwinds in the external freight market • Network efficiencies have largely offset these costs • Our ability to continue to off-set this cost pressure will become more reliant on closer partnerships with Customers and Carriers • JH Supply Chain must continue its hard push to optimize freight costs in our network 27

SUPPLY CHAIN SUMMARY 28

SUPPLY CHAIN SUMMARY • JH Supply Chain is focused on delivering customer value while optimizing financial returns • Our expanding network enables us to maximize both of these objectives – while requiring improved organizational and process capabilities • FY15 YTD we are delivering on our commitment of Customer Focus • We expect strong headwinds in the freight market to continue, and we are focused on offsetting the impact on JH financials 29

QUESTIONS